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Luxembourg Space Resources Act: Paving the legal road to space

28 September 2017

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Luxembourg sets out to become a global hub for the utilization of space resources

“Art.1. Space resources are capable of being owned.”1

By recognising this legal principle through the adoption on 20 July 2017 of the Act on the Exploration and Use of Space Resources (the Space Resources Act), Luxembourg has drawn significant international attention. It is the first adopter in Europe of a legal and regulatory framework for the space mining industry, describing in particular the authorization and supervision procedures for missions aiming to explore and use natural resources in space. These procedures have been largely inspired by those applicable to the financial sector.2

While the Space Resources Act also recognizes – at least implicitly - the rights that companies acquire during their space missions, the question of ownership in space will need additional clarification, as the domestic legislation will ultimately have to be complemented by international accords and cooperation.

Spaceresources.lu is an open and global oriented approach to commercial space utilization

Luxembourg is a pioneer in regulating and investing in the utilization of space resources. To date only the United States provides for a legal regime on space resources with the U.S. Commercial Space Launch Competitiveness Act of 2015 (the U.S. Space Act). Other countries, such as the United Kingdom and Russia, have wide-ranging statutes on the licensing of space activities, but none of them have specific provisions governing the utilization of natural resources in outer space.3 Moreover, the United Arab Emirates is also planning to enact a statute on commercial activities in space, including space mining.4

Contrary to the U.S. framework, however, Spaceresources.lu presents itself as a more open and global oriented approach to commercial space utilization. In particular, export controls on space technology in Luxembourg and in the European Union are generally considered to be less stringent and less costly than their American counterparts.5 In fact, ITAR (International Traffic in Arms Regulations) has been repeatedly criticized for stifling the U.S. space industry by making it difficult for U.S. companies to sell their products, such as commercial satellites or spacecraft components, outside the United States or to employ non-U.S. citizens to work on their complex and highly-technical projects.6 The growing market for “ITAR-free” technologies indicates that governments and companies are increasingly trying to find ways to lawfully address the long arm of U.S. export controls.7 The Luxembourg framework should hopefully open new market opportunities and ease the hiring process for spaceflight companies.

Legal clarification through international cooperation

The Space Resources Act is, however, not without controversy. As noted by the Luxembourg Council of State, it is not clear whether international space law allows for a country to grant property rights to natural resources extracted in space.8 The governing treaty in that regard is the 1967 Outer Space Treaty,9 which has been ratified by all the major spacefaring nations and is legally binding on 105 countries, including Luxembourg.10 While the Outer Space Treaty does not explicitly forbid the appropriation of space resources by private actors, Article II nevertheless raises concerns as to what extent a country may permit such appropriation by providing that “[o]uter space, including the moon and other celestial bodies, is not subject to national appropriation by claim of sovereignty, by means of use or occupation, or by any other means.”11

The academic literature is split on the question of ownership of space resources. While some authors consider private property rights in space to be legal by application of what seems to be the Lotus principle (i.e. what is not explicitly prohibited is permitted),12 others conclude that the appropriation of space resources may only make sense if the purported right is enforced, which would inevitably entail a national claim of sovereignty over a celestial body.13 Other authors again try to resolve the apparent contradiction by trying to draw parallels with the legal regime applicable to natural resources in the high seas.14 Either way, most seem to agree that the utilization of space resources needs a legal clarification on an international level.15

In that regard, Luxembourg has already signed several memoranda of understanding with other countries on the legal aspects of space mining and participates in numerous other international initiatives, such as “The Hague Space Resources Governance Working Group.”16 Furthermore, since the United States has taken a clear position – although with a slightly more nationalistic vision - in favour of private ownership of space resources with the adoption of the U.S. Space Act, Luxembourg should not be alone it its efforts to promote commercial space utilization.

Luxembourg ready to further invest in the space industry

Besides the legal framework set by the Space Resources Act and Luxembourg’s political engagements on an international level, space companies should also benefit from the unique ecosystem the Grand Duchy has to offer. As early as the 1980s, Luxembourg decided to invest in space by taking a major share in Société Européenne des Satellites (SES). Today, SES is one of the world’s leading communication satellite providers and owns over 50 satellites presently on orbit. In continuation of the country’s existing expertise in the sector, Luxembourg intends to launch, under the aegis of the Spaceresources.lu initiative, a fund offering financial support for innovative start-ups, as well as more mature companies in the space resources industry, with a commitment of 100 million euros.17 A number of industry players, such as Planetary Resources, Deep Space Industries, Kleos Space, GomSpace or ispace have to date availed of this possibility and have entered various agreements with the Luxembourg government. Further collaborations are expected and with the new legal framework provided by the Space Resources Act, it increasingly appears that in Luxembourg not even the sky is the limit.

9 Treaty on Principles Governing the Activities of States in the Exploration and Use of Outer Space, including the Moon and Other Celestial Bodies, Jan. 27, 1967, 610 U.N.T.S. 205 [hereinafter Outer Space Treaty].

10 The 1979 Moon Agreement, on the other hand, should only provide marginal reference as it has neither been signed by Luxembourg, nor indeed by any major spacefaring nation. The Moon Agreement has only been ratified by 17 countries (Australia, Austria, Belgium, Chile, Kazakhstan, Kuwait, Lebanon, Mexico, Morocco, the Netherlands, Pakistan, Peru, Philippines, Saudi Arabia, Turkey, Uruguay and Venezuela) versus the 1969 Outer Space Treaty which has been ratified by 105 countries, including the U.S., Russia, and China. See Comm. on the Peaceful Uses of Outer Space, Status of Int’l Agreements relating to activities in outer space as at 1 January 2017, U.N. Doc. A/AC.105/C.2/2017/CRP.7 (2017); Richard B. Bilder, A Legal Regime for the Mining of Helium-3 on the Moon: U.S. Policy Options, 33 Fordham Int’l L.J. 243, 269 (2009-2010) (“[T]he agreement should be given little weight as evidence of developing customary law.”); C.E., supra note 9, at 1 (“The Moon Agreement should be considered a failure.”).